Evaluating only Deliveroo’s profile at its peak — without knowing the outcome — the model ranked Unit economics as the #1 likely cause. That’s exactly how it died.
Key Events Timeline
FOUNDING
Deliveroo founded in London by Will Shu and Greg Orlowski as an online food delivery marketplace
FUNDING
Pre-IPO funding round closes with approximately $1.7B raised from investors including Amazon, T. Rowe Price, and Fidelity; company valued at $7.6B ahead of London Stock Exchange listing
FUNDING
IPO on London Stock Exchange at 390p values Deliveroo at GBP 7.6B; stock falls 30% to 271p on day one — worst major London IPO debut in decades
REGULATORY ACTION
Major institutional investors including Aberdeen Standard, Aviva, Legal and General, and M&G refuse to participate in IPO due to concerns about worker classification model and ESG mandate implications
DOWN ROUND
Deliveroo stock plummets below 90p, representing a decline of over 75% from IPO price of 390p; market cap falls to approximately GBP 1.9B
ACQUISITION ATTEMPT
DoorDash acquires Deliveroo for approximately GBP 2.9B — well below its GBP 7.6B IPO market cap
Full Analysis
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Documented cause
Deliveroo was founded in 2013 in London by Will Shu and Greg Orlowski as an online food delivery marketplace. Backed by Amazon, T. Rowe Price, and Fidelity among others, it raised approximately $1.7B before its IPO. Its March 2021 listing on the London Stock Exchange at 390p per share, valuing it at approximately GBP 7.6B (about $10.5B), was billed as London's most significant tech IPO in years and a catalyst for British tech listings. The stock fell to 271p on the first trading day — a 30% decline — described by commentators as one of the worst debuts for a major company on the London Stock Exchange in decades. Key institutional investors including Aberdeen Standard, Aviva, Legal and General, and M&G refused to participate in the IPO primarily due to concerns about Deliveroo's worker classification model and its implications for investor ESG mandates. The stock continued falling, hitting below 90p by 2022 — a decline of over 75% from IPO price. DoorDash acquired Deliveroo in May 2024 for approximately GBP 2.9B, well below its IPO market cap.
Lesson
“Gig economy unit economics depend on regulatory arbitrage — classifying workers as contractors rather than employees. When institutional capital started applying ESG criteria that penalise that arbitrage, the investor base for a Deliveroo-type IPO shrank to retail before the roadshow was finished.”